Business angels as alternative source of financing early stage investments
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Business Angels as alternative source of financing early-stage investments. Jacek Błoński Warsaw, April 22, 2008. WHO IS AN ANGEL INVESTOR?. Business Angels: Wealthy individuals Good business experience Good contacts and marketing skills Very often cashed out entrepreneurs or managers

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Business angels as alternative source of financing early stage investments

Business Angels as alternative source of financing early-stage investments

Jacek Błoński

Warsaw, April 22, 2008


Who is an angel investor

WHO IS AN ANGEL INVESTOR?

Business Angels:

  • Wealthy individuals

  • Good business experience

  • Good contacts and marketing skills

  • Very often cashed out entrepreneurs or managers

  • Actively supporting development of the company


Business angels as alternative source of financing early stage investments

Growth

Capital needs

IPO

High risk

Venture Capital Funds

Business Angels

Low risk

Friends, family and fools

Time

Seed

Early stage

Expansion

START-UP

BUSINESS ANGELS ON THE RISK CAPITAL MARKET


Lba key data

LBA KEY DATA

  • A group of ca. 70 individual investors associated with LBA, interested in early-stage companies with extraordinary growth prospects, no sector specialization

  • Typical investment – between EUR 50k and EUR 1.5m

  • Services provided to investors:

    • provision of carefully selected business plans, according to individual preferences and investment criteria

  • Services provided to entrepreneurs:

    • access to selected group of active investors


Business angels as alternative source of financing early stage investments

STRATEGY

LBA has established an extensive angel network in Poland and between 2005 and 2007 finalized 7 investments in different sectors/branches.

350

Ideas screened

2% of business plans submitted get financing

Many of the projects submitted to investors came from LBA’s partners

Negotiation process is less formal than with VCs, but also less predictable

Ideas refined in Meetings

45

Ideas submitted to the Investors

25

Number of Investments

7


Business angels as alternative source of financing early stage investments

PROJECT SELECTION CRITERIA

  • Experience and competences of the management team

  • Strong growth potential

    • Growing market or attractive niche

    • Competitive advantage

  • Founders involvement and commitment (also financial)

  • Identified and clear exit options

  • Business plan and financial projections – coherent and well thought


Business angels as alternative source of financing early stage investments

INVESTMENTS


Business angels as alternative source of financing early stage investments

COOPERATION WITH BUSINESS ANGELS–BENEFITS

  • Benefits for entrepreneurs seeking financing from business angels:

    • Provision of adequate financing, flexible terms

    • Experience and strategic know-how

    • Business contacts and relations within industry


Business angels network main problems

BUSINESS ANGELS NETWORK – MAIN PROBLEMS

  • Problems with self financing of the network – especially at the beginning (external financing highly needed)

  • Low quality of the incoming project at the initial phase of the new network (good training and PR needed)

  • Lack of appropriate know-how

  • Very limited number of business angels with experience in capital investments and exits strategies.


Business angels as alternative source of financing early stage investments

Opportunities for Ukrainian entrepreneurs

  • Some Business Angels associated with LBA do not exclude investing in foreign start-ups

  • LBA is interested in cooperation with Ukraine entrepreneurs looking for alternative sources of financing

    • Special interest in projects that can be developed internationally

    • Communication in English is necessary

  • And finally LBA can help in founding new Business Angel Network in Ukraine (next to Private Investors of Ukraine) and share some experience and thoughts to stimulate angel market.


Jacek b o ski lewiatan business angels www lba pl tel 022 845 95 96 fax 022 845 95 51

Jacek Błoński

LEWIATAN BUSINESS ANGELS

www.lba.pl

Tel: 022 845 95 96

Fax: 022 845 95 51


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